Stephanie Ferguson
Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce

Published

July 21, 2022

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In a previous post, we explained that last year, in compliance with USMCA’s requirements, workers at the Panasonic facility in Tamaulipas, Mexico voted to reject their union contract. On Monday, April 18, workers at the facility requested that the U.S. investigate the company for allegedly signing the workers into a new union contract with SIAMARM—a faction of the Confederation of Mexican Workers (CTM). According to the complaint, SIAMARM began withholding union dues from paychecks without the workers’ consent, and employees that protested the SIAMARM contract were fired—moves that would be in direct violation of the USMCA labor provisions. Days after the U.S. Government agreed to review the complaint, a new vote was held between SIAMARM and SNITIS. SNITIS, a relatively new union founded by Mexican labor rights activist Susana Prieto, won the union vote handily, claiming 75% of the 2,150 votes.  

Thirty days later, the U.S. formally leveraged the USMCA Rapid Response Labor Mechanism (RRLM)and asked Mexico to review whether workers at the Panasonic Automotive Systems facility in Reynosa, Mexico were being denied the rights to collective bargaining and free association. Mexico reviewed the complaint and facilitated discussions between SNITIS and the facility, culminating to a resolution announced by the U.S. on July 14.   

The resolution mandates that the facility take the following steps: 

  • Offer reinstatement and backpay to the 26 workers who were allegedly fired for union activity 
  • Reimburse workers for unpaid wages resulting from a work stoppage at the facility 
  • Negotiate a new bargaining agreement with SNITIS 
  • Renounce the SIAMARM collective bargaining agreement 
  • Reimburse workers for the dues paid to SIAMARM 
  • Recognize SNITIS as the workers’ bargaining representative  
  • Grant SNITIS access to the facility  

At the onset of the review, U.S. Trade Representative Katherine Tai directed the liquidation of all unliquidated goods entering the U.S. from the Panasonic Facility to be suspended. In practice, the liquidation of goods is the final step of the importing process, and the suspension of which can affect admissibility and duty calculations. This was the most severe action the U.S. has taken during an RRLM review. Throughout the course of the investigation and remediation, Mexico found that the issue at the Panasonic facility had been resolved. Tai agreed that the denial of rights had been resolved and directed the Secretary of the Treasury to resume the liquidation of entries of goods from the Panasonic facility.  

This is the third use of the RRLM since the USMCA was entered into force in 2020. Mexico is currently reviewing the fourth complaint under the RRLM to determine whether a denial of rights has occurred at the Teksid facility in Mexico. The findings of the review are due late July 2022. 

About the authors

Stephanie Ferguson

Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce